Garuda Indonesia Boss Suggests Ticket Price Ceiling Rules be Lifted

TEMPO.CO, Jakarta - National flag carrier PT Garuda Indonesia President Director, Irfan Setiaputra, suggested the government revoke the rules on the price ceiling (TBA) for airplane tickets, and rather let it be decided by the market.

“We hope TBA will be terminated. Today, we comply with the TBA rules, but some skip them. If there's nothing wrong, then let everything (prices) be opened [to the market],” said Irfan when met in Kebon Sirih, Central Jakarta, Monday, December 26, 2022.

The price ceiling for airplane tickets is set by The Transportation Ministry and applies to economy-class scheduled commercial flights. The airfare generally reaches the TBA during peak season, such as long religious holidays.

Irfan ensured that the airline's control over setting the highest price for the economy class will be maintained albeit its mechanism is unleashed to the market. The airline will consider pricing and its impact on market demand.

“The company's balance will still be fine and prices will remain affordable because, in the end, it's also the market that pegs the price,” Irfan explained.

Last June, the Transportation Ministry hinted at the possibility to revise rules on airfares. The ticket price ceiling and flooring were regulated in the Minister’s Regulation No. 20 of 2019.

In a joint meeting with the House of Representatives (DPR) Commission V on June 28, 2022, Secretary of the Air Transportation Directorate General Nur Isnin Istiartono said the government needed to pay attention to the continuity of the aviation industry in the midst of recovery efforts after the COVID-19 pandemic and pressure from global economic turmoil.

FRANCISCA CHRISTY ROSANA

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